Oil prices fall amid signs of easing of trade tensions

Oil prices fell after posting a third straight weekly decline, with traders assessing signs that trade tensions between the United States and China are easing. Brent crude traded near $61 a barrel, while West Texas Intermediate crude fell to $57. A new round of US-China trade talks is scheduled to be held this week, after US President Donald Trump expressed optimism about the possibility of reaching a deal, indicating that the high tariffs he has threatened to impose on China are “unsustainable”. PRESSURE ON PRICES Despite the easing of tensions at the same time, China’s economy slowed for the second consecutive quarter as strong export gains were offset by a decline in consumer and business spending. Oil futures are headed for a third monthly loss amid mounting pressure from an expected surplus in supplies through 2026, which the International Energy Agency last week expected to be larger than previous estimates. However, Ukrainian attacks on Russian energy infrastructure may lead to temporary price increases. Trump is planning a new meeting with Putin. In addition, Trump said last week that he intends to hold a second meeting with Russian President Vladimir Putin with the goal of ending the war in Ukraine, although previous talks have not made tangible progress toward stopping the fighting. Citigroup expected that if the conflict subsides, oil could fall to around $50 a barrel. Some market indicators point to weak demand, as the spot spread for Brent crude oil, ie the difference between the two nearest contracts, is still in an upward position, but has narrowed to 15 cents. In contrast, the spread between the two closest December contracts turned into a bearish structure last week.